Indianapolis, IN
Indiana lawmakers want to repeal Indianapolis’ special downtown taxing district
In the waning hours of the 2023 legislative session, lawmakers inserted into the state budget the ability for Indianapolis to create a special taxing district to spruce up the downtown and address homelessness.
Now there’s an effort underway to take it back, even as the city has already set the district into motion, with the approval of a new tax at the City-County Council’s final meeting of 2023.
Republican Rep. Julie McGuire of Indianapolis filed House Bill 1199 to abolish the city’s “economic enhancement district,” with support from Rep. Jeff Thompson, R-Lizton, the House’s lead budget writer. McGuire and Thompson had voted for the state budget; neither could be reached for comment Tuesday.
The City-County Council approved the new tax by a party-line vote. The now-threatened tax would be a flat $250 annual fee for homeowners and about 0.17% of other property owners’ assessed value, amounting to about $5.5 million in the first year for cleaning up downtown and supporting a low-barrier homeless shelter, among other initiatives. Collections would begin in spring 2025.
The late state budget add last year came as a surprise some of the General Assembly, as the proposal was finalized during closed-door negotiations.
In the months since, an anonymous group of Mile Square business and property owners opposed to the taxing district has pledged to lobby lawmakers to change or get rid of it. Former House Speaker Brian Bosma has been a public spokesperson for the group, DefendDowntown.com, which says it is concerned about how the tax will affect the cost of living and working downtown. The website doesn’t list any names.
Bosma argued in an op-ed in the Indianapolis Business Journal that renters could bear the brunt of potential fee increases, which may force people to leave downtown. The ordinance states that any increases cannot exceed the inflationary adjustment as determined by the U.S. Bureau of Economic Analysis.
Bosma also criticizes the fact that city leaders created this district without a vote from property owners.
Five of the district board’s eight members will be property owners, however.
The concept of a tax for a central business district isn’t new. Large cities have been instituting and reauthorizing such downtown taxing districts for decades. Downtown Indy Inc. led an effort in 2018 to create a similar taxing district through a petition process but faced strong opposition from the Indiana Apartment Assocation, and the campaign couldn’t get at least 50% of property owners to sign.
Last year, as the country tried to bounce back from the pandemic, Downtown Indy received $3.7 million from the federal American Rescue Plan Act to pay for cleanliness, public safety and homelessness initiatives downtown. The goal behind the economic enhancement district was to create a sustainable funding source to continue this work.
“We have to ensure that downtown isn’t just looking and feeling its best around big events, but that we have the ability to offer tailored, property-specific service, 365 days a year,” CEO Taylor Schaffer said.
The Indy Chamber talked to lawmakers about the idea during the 2023 session, not realizing it would come to fruition so soon, said Taylor Hughes, vice president of policy and strategy.
Then the Chamber spent the remainder of the year meeting with property owners in Mile Square to gather input on how much the fees should be and what specific initiatives they should fund, he said.
“We have worked really hard to build a solution that people can feel good about and that we think will begin to solve some of these really big problems; that doesn’t mean it’s the perfect solution,” Hughes said. “There might be opportunities to refine it. But we do need something. So the idea that a bill would be introduced to repeal what has been a really robust conversation, I think is pretty concerning.”
Republican Sen. Kyle Walker of Lawrence, who played a key role in getting the initial language added to the budget, said he did not anticipate the starting point for this session’s negotiations to be a full repeal, and said he doesn’t support that. Rather, he would support discussing more guardrails.
Walker said he thinks the district will help with both real and “perceived” problems downtown.
“Downtown certainly can be safer and can feel safer,” he said. “I’m not suggesting there’s not necessary improvement for public safety downtown. But I also believe that part of downtown’s issue is more perception-based, and I think the EED can address both of those.”
Contact IndyStar state government and politics reporter Kayla Dwyer at kdwyer@indystar.com or follow her on Twitter @kayla_dwyer17.
The Indiana Utility Regulatory Commission on June 17 gave AES the nod to raise electricity rates enough to earn an additional $71 million each year, a decision that drew reproof from Indiana lawmakers who called it another blow to cost-burdened consumers.
The approved rate represents less than half of the $192 million increase that AES initially requested. It’s also less than the $91 million increase proposed in an October settlement agreement between AES, the city of Indianapolis and major electricity consumers like Kroger and Walmart.
But the new rate is still significantly more than what the Indiana Office of Utility Consumer Counselor, the state agency representing ratepayers in the case, recommended in September. The OUCC’s proposal would have capped AES’s annual operating revenue at $21 million less than the current level.
The rate increase authorizes AES to earn a total of nearly $2 billion each year, or an estimated $384 million in profit.
The higher base rate comes as a double whammy for Indianapolis-area households, who are already paying more for electricity this summer after AES temporarily raised rates to account for higher-than-anticipated fuel costs during last winter’s storms. The increase also arrives against the backdrop of inflation, which rose to a three-year high last month, and surging gas prices due to the war in Iran.
Gov. Mike Braun wrote in a Wednesday post to X that he was “deeply disappointed” by the IURC’s approval of the rate increase.
“Hoosiers have spent years tightening their belts and making tough financial decisions,” Braun wrote. “It’s time for utility companies to do the same.”
The IURC’s decision also drew fire from the other side of the aisle. In a June 17 news release, five Democrats representing Indianapolis in the state Senate – J.D. Ford, Andrea Hunley, La Keisha Jackson, Fady Qaddoura, and Greg Taylor – chastised Indiana’s Republican supermajority for failing to rein in rising utility costs.
“Hoosiers pay more. Monopoly utilities collect more. And the leaders in the super-majority who promise affordability over and over again show those are just empty words,” the news release said. “Instead, they continue to defend a system that takes more and more out of our paychecks.”
The consumer advocacy group Citizens Action Coalition also slammed the rate increase. Ben Inskeep, CAC’s program director, said the decision left him “less optimistic that this commission is willing to do things differently and to actually hold utilities accountable.”
He said the IURC should have penalized AES for issues that plagued customers after the utility updated its billing system in 2023, including duplicated withdrawals for the same monthly bill.
The rate increase will take effect in two phases, with rates going up in July 2026 and January 2027. AES officials anticipate the hikes “will be less than $5 per month per phase” for a household that uses 1,000 kilowatt hours of electricity per month, according to a Wednesday news release from the utility.
“The IURC’s decision reflects a thorough, transparent process and balances the need for continued investment in the electric system with a focus on customer affordability,” the news release stated.
Under a state law that Braun signed in February, AES cannot ask for another increase to its base rate until January 2030 — though electricity bills could still go up for other reasons, like the fuel adjustment charge hitting consumers this month.
Three members of the five-member IURC signed off on the rate increase: Andy Zay, David Veleta, and David Ziegner. Commissioner Bob Deig dissented. Commissioner Anthony Swinger recused himself from the decision because he worked on the AES rate case for the OUCC before he was appointed to the IURC by Braun in January.
“None of this was taken lightly,” Zay, the IURC’s chair, said at the Wednesday hearing, adding that the commission and its staff had carefully weighed concerns about affordability. The commissioners did not go into further detail at the hearing.
But the commission’s order shows some of the debates that played out during the rate case. One point of contention was AES’s authorized return on equity — that is, how much the utility can earn each year in profits. Other disputes hinged on how AES forecasts its operating expenses.
The OUCC accused AES of including more than 100 “phantom hires,” vacant positions it did not necessarily intend to fill in its calculations. Last year, AES said that the rising costs of vegetation management, or trimming trees around power lines, also drove the need to raise rates. The OUCC recommended keeping vegetation management costs flat.
One factor that’s not driving higher prices? Data centers.
AES does not currently provide service to any data centers and did not include them in its calculations, AES president Brandi Davis-Handy said in testimony before the IURC.
Tilly Robinson is a Pulliam fellow for the Indianapolis Star. She can be reached at tilly.robinson@indystar.com.
Interactive radar | Weather alerts by county
WATCH LIVE COVERAGE
(WRTV) — A tornado watch has been issued through 1 a.m. EDT Thursday for much of Indiana, the National Weather Service’s Storm Prediction Center said.
The watch area covers 47 of Indiana’s 92 counties, and includes Indianapolis and its surrounding counties.
Counties in the watch area are Bartholomew, Blackford, Boone, Brown, Carroll, Cass, Clay, Clinton, Daviess, Decatur, Delaware, Fountain, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Howard, Huntington, Jackson, Jay, Jennings, Johnson, Knox, Lawrence, Madison, Marion, Martin, Miami, Monroe, Montgomery, Morgan, Owen, Parke, Putnam, Randolph, Rush, Shelby, Sullivan, Tippecanoe, Tipton, Vermillion, Vigo, Wabash, Warren, and White.
WRTV Meteorologist Ryan Morse says Wednesday afternoon’s rain was the first of two rounds coming to the Hoosier state. A line of supercells were expected to form in Illinois and travel into central Indiana.
In neighboring Illinois, dozens of counties are under a tornado watch until 10 p.m. CDT/11 p.m. EST.
All threats of severe weather were on the table: damaging wind, strong tornadoes, large hail, and flooding.
Severe storms should exit Indiana in the early morning hours.
WISH-TV Meteorologist Keith Gibson says people should have multiple ways of getting alerts and have electronic devices fully charged in case they lose power.
The next chance for rain after these storms could be on Saturday.
-
Wyoming3 minutes ago250 Portraits self-portrait exhibition now on display throughout downtown Jackson
-
Crypto10 minutes agoCrypto’s Courtside Takeover: Digital Assets in Pro Tennis
-
Finance12 minutes agoConsumer confidence plunges among younger adults
-
Fitness17 minutes agoKylie Minogue, 58, shares how she stays fit without a strict exercise routine – ‘I don’t really work out’
-
Movie Reviews27 minutes agoMovie Review: ‘Leviticus’ makes a demon out of desire in an auspicious debut for Adrian Chiarella – Sentinel Colorado
-
World40 minutes agoVideo: A Small Election Could Change British Politics
-
News42 minutes agoInside Trump’s Touring Exhibition of American Heroes
-
Politics47 minutes agoVideo: Erika Kirk’s Message for Women at Turning Point USA
